The Company Town (27 page)

Since a boom began abruptly and could be short-lived, no one cared to invest in building housing for such people, so they were left with tents or shacks. Many swarmed into flophouses that rented cots at 50 cents for an eight-hour shift. Some resorted to sleeping under sheets of galvanized iron that were propped up a few inches above bare ground. In Ranger, an enterprising landlord set up a large circus tent filled with row upon row of cots (the solution was much copied thereafter), and one farmer there rented out his hog shed.

There were hotels—often barracks-like flophouses. Those lucky enough to land a bed there would share a room with another person and, after eight hours, would have to make way for a second shift of sleepers. It was not unknown for hotel proprietors to move their buildings from boomtown to boomtown.
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By the 1920s all the major oil companies had erected more permanent “company camps,” with substantial housing renting for as little as $3 per month, aiming to retain a skilled workforce. The area around Midland alone contained thirty-eight camps. Humble Pipe Line's Kemper Station
Camp consisted of orderly rows of houses painted in uniform colors. That company's camp near the town of Wink housed four hundred refinery workers and featured a community center, baseball field, playground, and swimming pool. Around the town of McCamey, seven companies had camps. Some houses there were even relatively luxurious, with two bedrooms, a kitchen, a dining room, and a single bath. And Big Lake Oil's Texon camp in the remote Permian Basin offered such amenities as a hospital, nondenominational church, clubhouse, swimming pool, theater, and golf course. Its pleasant two- or three-room bungalows featured running water and electricity, hardwood floors, and front lawns.

Some camps evolved into more substantial settlements: Oklahoma-based Phillips Petroleum built a large camp at Pantex in the Texas Panhandle, which eventually became the town of Phillips. The Amarillo-area camps of Skelly and Roxana came together to form a town of several hundred, Skellytown, with two refineries and a carbon black plant.

Many were unsavory places. At Mexia, bootlegging became so flagrant in 1922 that the Fifty-Sixth Cavalry of the National Guard was dispatched to support federal agents. One of the most notorious towns was Borger, near Amarillo. Founded in 1926 by Oklahoma town-site promoter A. P. “Ace” Borger, the rough-and-ready village featured numerous hotels, cafés, a plethora of decrepit wooden buildings, gambling halls, brothels, and speakeasies within weeks of an oil strike. Borger's citizenry showed little interest in observing the law, and the moonshine and narcotics trade flourished. In 1929, an area district attorney was murdered prompting Texas Governor Dan Moody again to send in the National Guard and to place Borger under martial law.

Wink was equally rowdy, dominated in its boom years by an allied group of bootleggers, gamblers, and corrupt politicians. At first the settlement had no law officers, and the closest sheriff was an hour away. With lawbreaking rampant, the Texas Rangers raided the town on several occasions in the late 1920s, to little lasting effect; in 1929, four people were killed in a murder spree. Such goings-on contrasted strongly with life in the nearby Humble Oil camp, which was reserved for supervisory workers such as “gang pushers.” Strict camp rules required house inspections by the company and prohibited the keeping of dogs or livestock.

But most company camps proved temporary affairs. By the late 1950s, the companies had come to see them as expensive and outdated. Improvements in the Texas roads meant that workers could live in established towns and commute to the oil fields by automobile. Humble sold off its houses to workers and even subsidized their removal to other locations.
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Some towns retained a sizable population by becoming specialists in refining or administration. Beaumont and Port Arthur had the advantage of being near the Gulf Coast and so remained refining centers even as oil production shifted from that region to as far away as the rich Glenn Pool in Oklahoma. Port Arthur, which had a negligible population in 1890, was home to 22,000 residents by the 1920s, when both Gulf Oil and the Texas Co. had built large refineries there. By 1909, it already had become the fastest growing port in the United States and increasingly participated in global markets, with shipments to England and the Netherlands.

Texas is such a large state and the oil fields covered such a wide area that several regional oil centers emerged. Among these were Wichita Falls, which became home to the headquarters of several independent oil companies and refineries; Amarillo, a former cattle town that housed regional offices for Phillips and Shamrock Oil and Gas; and Fort Worth, a onetime railroad hub where Gulf, Marland, the Texas Co., Skelly, and Phillips all opened offices.
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In Oklahoma, the town of Bartlesville, forty-five miles north of Tulsa, became an administrative center for Phillips Petroleum and Cities Service Co. after booming in the early 1900s. Frank Phillips, an ambitious onetime barber and bond trader, came to the area in 1903 and found a frontier town already jammed with oil derricks and crowded with rough-necks and speculators. Oil had first been discovered on Cherokee land near Bartlesville in 1897. Phillips, a bespectacled sharpie who had once invented a baldness “cure” based on rainwater, was casting about for a new opportunity and had been tipped off to the area's potential by an acquaintance who had become a Methodist missionary to the area's Indians. After one glimpse of Bartlesville's frantic oil activity, Phillips rushed back to his home in Creston, Iowa, recruited his brother L. E. to the cause, and enlisted financial backing from his banker father-in-law. By February 1905, Phillips—who of course knew nothing of the oil trade—had begun drilling on leases acquired over several trips to Bartlesville.

He quickly struck oil, but his first well produced very little. Then within six months, he hit a gusher on land leased from a Delaware Indian girl, Anna Anderson. Eighty-one producing wells followed. But rather than place all of their bets on petroleum, the Phillips brothers also opened the Citizens Bank to cater to area oilmen. The Phillipses didn't believe in doing anything by halves, and soon they had built a two-story bank building with three vaults and impressive marble counters. Within three years, they had absorbed the Bartlesville National Bank and, by 1920, the much larger First National Bank of Bartlesville.
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For a time, Oklahoma was producing more oil than Texas. Tulsa-area oil strikes in 1901 were followed by the discovery in 1905 of the richest oil allotment ever, the so-called Glenn Pool on the Ida Glenn farm outside of Tulsa. The central Oklahoma Cushing field, discovered in 1915, was shortly responsible for 20 percent of the oil produced in the United States. Then in 1917, Phillips drillers hit a huge gusher in the Osage Hills.

The Osage strike, along with the impending world war, prompted Frank Phillips to transform his partnership into a public company, Phillips Petroleum Co. With its twenty-seven employees and stash of oil leases, Phillips Petroleum issued 15,000 shares of preferred stock, mostly to insiders.

As in Texas, Oklahoma's oil workers lived close to the derricks. The area known as the Burbank Field near Ponca City was producing 32 million barrels of oil in its peak year of 1923. The field, which included such settlements as Webb City, Carter Nine, Shidler, Lyman, and Whizbang, became home to 45,000 people.

Meanwhile, Bartlesville continued to develop as an oil-company administrative center, with Cities Service Co., the Indian Territory Illuminating Oil Co., and 157 other oil companies headquartered there. Phillips Petroleum, the largest such outfit, erected a new seven-story headquarters in 1925, complete with mahogany-paneled offices for its executives. The company's assets, $3 million in 1917, had soared to $130 million. It owned 1,759 producing oil and gas wells and supported a total payroll of $5.36 million. Such were its ambitions that it opened a research wing and, in the late 1920s, an “aviation department,” intended largely to publicize the company's products via skywriting and such stunts as an air race from Oakland, California, to Honolulu. Among the company's products were an airplane fuel, dubbed Nu-Aviation, and automobile gasoline, to which
it assigned the moniker Phillips 66, after the federal highway that spanned much of the continent. And in a further exercise of daring, Phillips Petroleum entered the arena of gasoline retailing: By 1930, it had opened 7,000 English-cottage-style gas stations in twelve states. With a refinery in Borger, a pipeline that stretched from there to East St. Louis, Illinois, a bevy of filling stations, and numerous administrative departments, Phillips entered the 1930s as a vertically integrated company.

In the late 1930s, with Frank Phillips entering his last decade, he created the Frank Phillips Foundation with a $66,000 higher-education fund devoted to scholarships for employees' children. He also donated $50,000 toward completing a new senior high/junior college for the area. Phillips didn't seem to care much what other people thought of him: He was fond of dressing up, sometimes in Indian war bonnets, or in Hollywood-cowboy gear complete with tooled-leather chaps and a holstered six-gun. Combined with his owlish accountant's face and physique, the costumes made him look like the silliest tenderfoot at the dude ranch. No matter—let them laugh. In his own mind, Phillips was a tough guy and also a philanthropist who willed his 3,600-acre ranch and wildlife preserve, Woolaroc (woods-lakes-rocks), and his private museum of western artifacts, to the foundation, intending that they serve educational purposes. Phillips died in 1950, a year after retiring from the company.

Phillips Petroleum emerged from the 1940s as the largest marketer of liquefied petroleum gases, an innovator in chemicals, and the producer of 93,000 barrels of crude oil in 1945. It sponsored foreign oil field exploration in Venezuela, Colombia, Mexico, and elsewhere—in 1969, Phillips pioneered discovery in the North Sea.
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Bartlesville, where half of all local economic activity was tied to the company in one way or another, was proud to be thought of as the home of Phillips. In 1978, a locally produced coffee-table book described the town's colorful history and devoted several chapters to “the company that stayed home.” (Cities Service, by contrast, had moved its headquarters to Tulsa in 1968.) The town's identification with and dependence upon Phillips was made very clear in the 1980s, when two corporate raiders—T. Boone Pickens in 1984 and Carl Icahn in 1985—made independent runs at the company. To fend off the raiders, Phillips bought back half of its stock, taking on $8.6 billion in debt. Many in the town of 35,000,
where 8,000 were on the company payroll, freaked out. Some attempted to amass nest eggs—and the number of bad checks soared by 41 percent. Episodes of domestic violence rose as well, according to the local women's crisis center. The First Baptist Church sponsored a round-the-clock prayer vigil, calling upon the Almighty to aid Phillips management in its defense. And one Bartlesville citizen mailed a shocking package to Pickens: a five-foot-long coffin-shaped box . . . containing not a bomb but a letter detailing the sender's anxieties over the possible takeover.

The combination of company debt, Phillips's cessation of oil exploration, and the 1986 fall of oil prices, from $27 a barrel to $10, seemed to portend that the company might disappear in the way of Bartlesville's other historic oil concerns. But by 1996, Philips had paid off much of its debt, resumed its profitable North Sea activities, and begun employing sophisticated technology in pursuit of new discoveries in Mexico, China, Algeria, and Indonesia. The following year, Phillips doubled in size by buying Atlantic Richfield's Alaska production facilities, and then it became the second-largest U.S. refiner with a purchase of the independent Tosco Corp.

Bartlesville is less of a company town today. In 1999, Phillips merged with Houston-based Conoco—really a takeover of Conoco in which Phillips shareholders emerged with more than half of the new entity's stock and the Phillips CEO, James Mulva, became head of the new entity, but ConocoPhillips moved its headquarters to Houston. Nevertheless, ConocoPhillips continues to have operations in Bartlesville, including a global data center and a company-history museum, employing around 3,000 people. Like much of U.S. capitalism, the company is at the time of this writing taking some lumps due to the U.S. recession—in 2008, it posted a net loss of $17 billion.
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Oil at first drew its chief economic value from its use in making kerosene, a fuel for lamps. But around the turn of the twentieth century, the automobile began to catch on, and 8,000 were registered to individual owners in 1900. Within a decade, gasoline sales surpassed those of kerosene. By 1920, there were 9.2 million autos on America's roads.
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U.S. automobile production was of course long centered in Detroit, an economically diverse metropolis that hardly merits consideration in this account. But the Ford Motor Co. built its largest plant in one area—the town of Dearborn—that qualifies as a company town situated within metropolitan Detroit.